A project will cost $100,000 and will last 5 years with no salvage value: Revenues Sales $70,000 Operating Expenses: Rent Expense $30,000 Depreciation Expense 10,000 Miscellaneous Expense 8,000 Total Expenses 48,000 Net Income $22,000 Instructions a. Calculate the expected annual rate of return on this project showing calculations to support your answer. b. Calculate the cash payback on this project showing calculations to support your answer.

A project will cost $100,000 and will last 5 years with no salvage value: Revenues Sales $70,000 Operating Expenses: Rent Expense $30,000 Depreciation Expense 10,000 Miscellaneous Expense 8,000 Total Expenses 48,000 Net Income $22,000 Instructions a. Calculate the expected annual rate of return on this project showing calculations to support your answer. b. Calculate the cash payback on this project showing calculations to support your answer.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter12: Capital Budgeting: Decision Criteria

Section: Chapter Questions

Problem 10P: Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year...

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